A New Virus Reinforces Old Lessons

If anyone had asked a CEO or CFO what they expected to threaten their business in 2020,a novel virus transmitted from an animal to a human would surely fall quite far down the list of likely suspects.

- Lynette Schultheis

Since the emergence of the COVID-19 virus, and in the space of several weeks, many regions and countries have had travel and movement restrictions put in place including China, South Korea, Hong Kong, Singapore, Iran, Italy, Spain and France. At the time of writing, things remain uncertain in Australia. These restrictions are creating serious supply chain disruptions, production delays and distribution slow down, creating a major threat for many senior leaders whose businesses depend on global inputs. Industries such as travel, hospitality and education are also facing particularly troubling times.

Many businesses in Australia and beyond are already reporting significant disruptions and reducing revenue forecasts accordingly. Many more say it is as yet unclear exactly how much disruption they will encounter. In a survey by CNBC Global CFO Council, just under 22 per cent of companies have seen a supply impact, but more than 37 per cent of CFOs surveyed indicated it is still too soon to know.

PULLING THE TRIGGER

While some now argue that this crisis is merely the trigger for an expected market correction, surely no-one could have foreseen that this would be how that correction would begin.